What We Can Learn From China About IoT

When I first visited Beijing 25 years ago, the streets and sidewalks overflowed with people, bicycles and trucks. I just returned from my 14th visit, and while the bustle of traffic remains, there’s a tangible difference. Today, smart fleets of bicycles, buses and trains embedded with Internet of Things (IoT) technologies are making urban transportation smarter, more accessible and efficient.

In many ways, smart ride-sharing conveys the essence of China’s IoT transformation: It draws on Chinese traditions while integrating advanced technologies in novel and unexpected ways. I was struck by signs all around that China is no longer a tech imitator — it has matured into a tech innovator, solidifying its place as an IoT leader.

China's tectonic shift toward IoT adoption, innovation and R&D has seemingly happened overnight. Inspired by the successes of internet giants such as Tencent, Baidu and Alibaba, numerous IoT startups, together with large service and technology providers, exhibited a new entrepreneurial zeal I didn’t see during my visit three years ago.

A Hive Of IoT Activity

I saw first-hand how the growth of IoT permeates almost every business segment and public system, not only manufacturing and industrial sectors but also transportation, city services (including pollution reduction), healthcare, retail, agriculture and more.

Bike-sharing services, such as Ofo or Mobile, which allow consumers to find and pay for bike rentals with mobile phone apps, have taken off like wildfire. I saw these multicolored, IoT-enabled bikes everywhere, parked wherever the last user left them.

In Beijing, I used Didi Chuxing, a ride-hailing company that acquired Uber China in 2016. When I clicked Didi’s app, it automatically translated questions and answers back and forth between myself and the nearest driver, who found me in his electric vehicle (EV) within 30 seconds.

Didi exemplifies many new companies that are rapidly expanding and diversifying their IoT services. In addition to smart ride-sharing, Didi operates one of the world’s largest EV fleets and is emerging as an “autonomous superpower.” It’s just one of many businesses here venturing into EV and autonomous vehicles and infrastructure. Maybe I’ll hail a driverless vehicle during my next visit.

Whether at my hotel or public places, wireless communications networks linked to city services seemed ubiquitous in Beijing. ABI Research reports other major cities (Dalian, Hangzhou, Nanjing, Tianjin) are also leveraging these networks to accelerate smart city services, including energy, transportation, public safety, lighting, sustainability and more.

Drivers Of China’s IoT Ambition

Of course, the Chinese government has promulgated IoT since 2010 when it set an ambitious market target of 163 billion U.S. dollars by 2020. However, with 20% annual growth the past few years, the China Economic Information Service now thinks the Chinese IoT market could reach more than 230 billion US dollars by 2020.

Today, government policies provide preferred tax breaks to IoT manufacturers, and the Special Fund requires public entities to have an IoT initiative. To lead autonomous transportation and other IoT solutions, China is proactively recruiting experts in artificial intelligence (AI), data science and other cutting-edge domains from major tech companies in the United States and elsewhere.

Government is not the only driver of China's IoT ambitions. After speaking at Peking University, I met with startups developing an array of applications — from connected, mobile offices to underwater drones for safety and security. At the China Europe International Business School, an executive of a vending-machine business shared with me his ambitions, including plans to evolve his current “smart” vending machine with NFC technology, to a fully personalized, automated service preparing drinks and meals just the way you like them, all powered by IoT, fog computing and AI.

Many think of Chinese companies in the context of how they compete with Western technology providers. However, the China market itself is extremely dynamic and highly competitive, and not just among the major players; packs of aggressive startups are pushing hard to unseat current leaders, especially around IoT and AI. Today, IoT startup hubs are popping up country-wide, and Chinese entrepreneurs are taking more risks. They no longer feel stigmatized if their venture fails. In fact, rock star technologists who launched their careers in Silicon Valley are moving back to China to pursue new opportunities. Now, when you visit Shenzhen — their “hardware Silicon Valley,” you see a multitude of thriving IoT companies with global aspirations.

Lessons Learned From China

While the Chinese government’s top-down IoT policies would not work in many countries, we should not discount the important role governments can have in stimulating technology markets. Like the birth of the Internet and GPS or support for clean energy and tech apprenticeships, the role of governments as regulators, agenda setters and technology adopters in IoT has been profound. We should encourage continued government i

I believe we should take notice and consider adopting China’s other successful IoT strategies: Think globally, take action locally and don’t be afraid to commit to revolutionary rather than evolutionary change. Start with small successes and scale them to a larger platform. Don’t let the fear of failure keep you from experimenting or taking risks. Be active in standards development — the Chinese are now embracing and heavily investing in key international standards bodies rather than promoting China-specific standards.

Pursue fruitful partnerships of all kinds (public-private, in and outside) to help co-develop and massively scale your IoT solution, and take a cue from Chinese entrepreneurs who now exude the same hunger, optimism and gung-ho work ethic (paywall) found in major global technology hubs.

The IoT industry's future hinges on horizontal, vertical and regional specialists working together toward common goals. To excel on the global stage, it’s time to engage with Chinese partners and learn from their “overnight” successes. I’ll continue to follow what’s happening there, but I’m already eager for my next visit to see, experience and learn from and about China’s ongoing IoT transformation.

Maciej Kranz , Forbes Councils

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?

11 March 2018  -  Forbes.com (https://www.forbes.com/sites/forbestechcouncil/2018/03/05/what-we-can-learn-from-china-about-iot/#52915e9b37af)